Renters wanted

Sunday

Nov 30, 2008 at 12:01 AMNov 30, 2008 at 1:19 PM

The vacant eighth-floor penthouse at Carlyles Watch was decked out in spooky Halloween decor. The kitchen was stocked with gourmet sandwiches and cheeses, and a uniformed caterer mixed cocktails in the dining alcove.

The vacant eighth-floor penthouse at Carlyles Watch was decked out in spooky Halloween decor. The kitchen was stocked with gourmet sandwiches and cheeses, and a uniformed caterer mixed cocktails in the dining alcove.

But the party last month wasn't just for residents. The bash was intended to attract a new breed of tenants to the $16 million luxury building Downtown.

Renters.

With 31 of the building's 54 units unsold -- despite a public auction in October 2007 that generated lower-than-expected bids -- Cleveland-based Urban Loft Ventures decided in January to seek renters to occupy the rest.

Despite the initial setbacks, renting has indeed paid off. All unsold units except the penthouse are occupied by long- and short-term residents. A steady flow of interested newcomers has since visited for showings.

Monthly leases for one- and two-bedroom Carlyles units range from $1,000 to $3,000 -- among the area's highest costs per square foot for rentals, Burgess said -- but they are attractive to well-heeled urban dwellers unprepared (or unwilling) to buy.

The Carlyles isn't an isolated example.

A slumping economy and an abundance of empty properties have turned Downtown condominium developers into reluctant landlords to offset stagnant buyer interest.

"It's a matter of survival," said Ken Danter, president of the Danter Co., a Columbus real-estate research company. "We overbuilt the (Downtown) market in a relatively narrow band of (price) choices."

Since 2004, Downtown has mushroomed, with at least 16 new condo buildings open or under construction.

Four of those projects -- 199 S. 5th St., Caryles Watch, CityView at 3rd and the Lofts at 106 -- offer direct rental options while others have individual units available for lease by owners.

Sixty Spring, a 104-unit Downtown development that opened in 2005, had planned to lease two-thirds of its units for one year, but it has continued to rent the units because of their popularity among young professionals.

Several new buildings nearby are following suit, including the Jeffrey in Italian Village, which was planned as a condo development but instead became a mixture of rentals and owner-occupied units when it opened in 2007.

Neighboring Kramer Place was converted entirely from condominiums to rentals this summer because not a single unit was sold in the year since construction ended. The Italian Village building is now 80 percent occupied.

Brewer's Gate, a collection of 35 town-home condos in the Brewery District, offered several vacant units for rent in the spring -- and, more recently, a 30-year fixed mortgage at 4.99 percent to those wishing to become owners.

With perks ranging from gym memberships to free parking, the terms of such urban projects target a metropolitan-minded clientele.

"People like the fact they can move Downtown without locking into something," said Kara Kowalke, a real-estate agent working for CityView at 3rd, where 16 vacant condos in the 48-unit building began leasing last month. "It's a lower-risk situation."

And for transplants from larger cities, where smaller spaces are common -- and a four-figure monthly rent is often standard -- the amenities and spaciousness come as a pleasant surprise.

"The difference is drastic," said Josh Russell, 32, who moved from San Francisco to Columbus in October to work as a merchandise planner.

He rents a 1,400-square-foot, two-floor unit with private parking in the Lofts at 106 -- a space, he said, that would easily lease for $5,000 a month in California.

Rent at the Lofts at 106 ranges from $1,000 to $3,000 a month, with the average about $1,500, said real-estate agent Niels Oomkes, who represents the property. A leasing arrangement was placed on 26 of the building's 48 units (all of which may still be purchased outright), with six remaining units available.

Should he choose to buy a place in the future, Russell doesn't plan to limit his search to Downtown properties.

"But I don't want the suburbs," he said.

Downtown properties remain a pricier pursuit than those of other central Ohio neighborhoods.

The average list price for a Downtown condo is $343,000, according to Multiple Listing Service data pulled by Columbus Realtor Marilyn Vutech.

Though that figure is significantly higher than the area's average condo selling price of $268,000 in 2007, the diversity of the area's listed properties -- ranging from $130,000 to $1.4 million -- can offset averages with a single property.

MLS data show that 155 Downtown condos are on the market. In 2007, before the mortgage meltdown, 114 total units were sold.

And construction continues on the Edwards Cos.' Neighborhood Launch, a Downtown residential village starting at the corner of N. 4th and Gay streets that will add 260 more units to the mix.

For the moment, real-estate agents and developers are hopeful that leasing and rent-to-own options will turn temporary dwellers into long-term residents in buildings that could use the income.

"(Renters) will eventually look at these rents and say 'This is nuts -- I could be buying for this,' " Vutech said.

"If they're comfortable there, they'll pull the trigger and buy."

At the 199 S. 5th St. development, an influx of renters offers the "ability to carry the project until the market turns around," said Annette Trembly, the building's broker.

Since the first units opened in February, three of 22 condos have gone into contract. The rest can now be leased, with five units remaining.

Trembly isn't bothered by the arrangement, which provides leases for $1,400 to $3,900 a month.

"It is not intended to be a (long-term) rental," Trembly said. "It will all end up being owned, probably within a year.